ITV plc Interim Results 2009 6 th August 2009 Interim Results 2009 0
Overview Michael Grade Interim Results 2009 1
Agenda � Overview Michael Grade � Financial review Ian Griffiths � Operating review and current trading John Cresswell � Q&A Interim Results 2009 2
Overview � NAR downturn in H1 2009 unprecedented � ITV increasing share of TV ad market, but NAR down £108m � Operating EBITA down £75m to £46m � Operating cashflows up £51m to £168m � Adjusted loss per share of 0.5p (2008: adjusted EPS: 1.5p) � Rate of market decline easing in Q3 � Interim dividend suspended Year-on-year UK TV NAR growth, H1 1990- H1 2009 20% 15% 10% 5% 0% H1 90 H2 91 H1 94 H2 95 H1 97 H2 98 H1 00 H2 01 H1 03 H2 04 H1 06 H2 07 H1 09 -5% -10% -15% -20% Interim Results 2009 3 Source: ITV estimates; 1990-92 data based on ITV / C4 performance
ITV’s response ITV implementing comprehensive response to the downturn, outlined in March 2009: � Core business performance Holding peak audiences, winning ad market share, growing production revenues � Cost savings £155m of savings in 2009, weighted to H2; rising to £215m in 2010 and £285m in 2011 � Cash and balance sheet Reducing stock, improving cash conversion and liquidity Interim Results 2009 4
Regulation and Governance CRR � Provisional decision from Competition Commission due in September � Final decision on course for 2010 deal round Digital Britain � Consultation on “independently financed news consortia” closes in September � Two pilots in ITV plc regions proposed from 2010 � Review of licence payments brought forward Chief Executive appointment � Proceeding in accordance with timetable set out in previous Board statement Interim Results 2009 5
Financial Review Ian Griffiths Interim Results 2009 6
Group performance Reported £m 2009 2008 Revenue 909 1,031 Operating EBITA pre exceptionals 46 121 Amortisation (31) (30) Goodwill impairment 0 (1,600) Exceptional items (total) (81) 2 Associates, JVs and Investment Income (4) (4) Loss before interest and tax (70) (1,511) Net financing costs (35) (26) Loss before tax (105) (1,537) Tax 35 3 Loss after tax (70) (1,534) Loss per share (1.8p) (39.6p) Interim Results 2009 7
Group performance Adjusted £m 2009 2008 Operating EBITA pre exceptionals 46 121 Associates, JVs and Investment Income (4) (4) Interest (before amortised cost adjustment & tender and exchange gain) (56) (26) Loss / profit before tax (14) 91 Tax (3) (33) Loss / profit after tax (17) 58 Minority interests (2) (1) Loss / profit for the period (19) 57 EPS (p) (0.5p) 1.5p Interim Results 2009 8
Segmental analysis Revenue £m 2009 2008 % Change Broadcast 721 832 (13) Online 18 17 6 Broadcast & Online 739 849 (13) Global Content 168 149 13 Other 2 33 (94) Total Revenue 909 1,031 (12) 1,100 1,031 108 1,000 £m 31 20 7 909 4 900 800 H1 2008 NAR Minority revenues International CSA Other H1 2009 productions Interim Results 2009 9
Segmental analysis EBITA £m 2009 2008 % Change Broadcast 12 89 (87) Online (6) (8) 25 Broadcast & Online 6 81 (93) Global Content 40 39 3 Other 0 1 (100) Total EBITA pre exceptionals 46 121 (62) £m 140 108 121 120 100 80 15 7 5 7 42 60 5 46 40 20 0 H1 2008 NAR Schedule savings Efficiency Minority revenues Transmission / Other Movements H1 2009 savings HD Broadcasting outside movements Broadcasting Interim Results 2009 10
Broadcast Financial performance £m 2009 2008 % Change Revenue ITV NAR 615 723 (15) Sponsorship 30 27 11 Media Sales, PRS and other income 55 66 (17) SDN 21 16 31 Broadcast revenue 721 832 (13) ITV.com* 10 5 100 Friends Reunited & Scoot 8 12 (33) Total Broadcast & Online Revenue 739 849 (13) Schedule costs (520) (562) (7) Other costs (189) (181) 4 Online costs (24) (25) (4) Total EBITA pre exceptionals 6 81 (93) * ITV.com revenue includes all online revenue excluding potential disposals Interim Results 2009 11
Broadcast NAR performance NAR, % year on year change Revenue by top 10 category y-o-y performance Q1 Q2 H1 % Q1 Q2 H1 -10 Retail (22) (3) (12) Food (12) (10) (11) Entertainment 2 (10) (5) Finance (10) (18) (13) Cosmetics (15) (17) (16) -15 Cars & Car Dealers (27) (49) (38) -15 -15 -15 Household Stores (15) (18) (16) -16 Pharmaceuticals 1 2 1 -17 Telecommunications (14) (18) (16) -18 Government 11 (7) 4 -20 ITV Family Market Interim Results 2009 12
Global Content Financial performance £m 2009 2008 % Change Revenue UK Productions 31 28 11 Resources 7 9 (22) International Productions 75 55 36 Distribution & Exploitation 55 57 (4) External Revenue 168 149 13 ITV Supply 128 136 (6) Total Revenue 296 285 4 Total EBITA pre exceptionals 40 39 3 Interim Results 2009 13 Notes: Foreign exchange movements benefited 2009 revenues by £14m and EBITA by £3m
Exceptional items £m 2009 2008 Reorganisation and integration costs (28) (9) PRS 0 (6) Kangaroo (2) 0 Total operating exceptional items (30) (15) (Loss) / gain on the sale and impairment of properties (4) 0 Loss on closure of business 0 (8) Gain on the sale, net of impairment, of subsidiaries and investments (47) 25 Total non-operating exceptionals items (51) 17 Total exceptional items (81) 2 Interim Results 2009 14
Interest £m 2009 2008 Financing Costs directly attributable to bonds (41) (39) Interest from cash on deposit and other 1 14 Cash-related financing costs (40) (25) Mark-to-Market on swaps & FX on bonds (9) (9) Imputed pension interest (7) 8 Total adjusted interest charge (56) (26) Amortised cost adjustment 7 0 Gain on Exchange of €500m Bond 14 0 Total statutory P&L net financing costs charge (35) (26) Interim Results 2009 15
IAS19 Pension Deficit 600 170 538 500 400 187 300 10 39 178 32 200 100 0 Dec-08 Pension costs Company Impact of Impact of inflation Movement in Jun-09 £m through P&L Contributions (inc Discount rate assumption value of assets deficit funding) P&L charge £m H1 09 H2 08 Current service cost (3) (6) Net interest cost (7) 8 Total income statement (10) 2 Interim Results 2009 16
Cash flow and working capital Profit into cash performance Net debt reconciliation £m 2009 2008 £m 2009 Operating cashflow 168 EBITDA 63 139 Exceptional cash (43) Decrease / (increase) in stock 75 (38) Tax and interest (26) Decrease / (increase) in debtors 35 (13) Net M&A cashflows (50) Increase / (decrease) in creditors 3 50 Dividends (25) Working capital movement 113 (1) Pension deficit funding (31) Share based compensation 7 5 Other 9 Capex (15) (26) Change in net debt 2 Operating cashflow 168 117 Opening net debt (730) Closing net debt (728) Profit to cash ratio 267% 84% 12 month rolling average 110% 87% Net debt /EBITDA ratio* 4.26 Cash and net debt £m 2009 2008 Cash and cash equivalents 518 616 Debt (1,246) (1,346) Net debt (728) (730) Interim Results 2009 17 * 12 month rolling
Improving liquidity and debt maturity profile Funding – actions taken: £m 2009 2009 Eurobond repaid (250) 2013 Loan Drawdown 125 2015 Bond tap 58 2019 New bilateral facility 50 Bond tender and exchange (69) £m Maturity Profile at Dec-08 £m Maturity Profile at Jun-09 500 500 425 400 400 335 325 300 250 250 300 250 235 200 200 140 126 110 100 100 62 0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Interim Results 2009 18
Operating Review and Current Trading John Cresswell Interim Results 2009 19
Operating review H1 summary Core operating performance � Broadcasting: holding audience and winning ad market share � Online: delivering greater reach and growing video views � Global Content: building global revenues and holding profits Costs � Savings targets increased and on track � Headcount reducing significantly � Consultation underway on pension changes Cash � Significant working capital improvements containing net debt � Managing balance sheet to improve liquidity � Disposals processes in train Interim Results 2009 20
Broadcasting Viewing share stabilised All time ITV family share of viewing 40 35 30 25 20 15 10 5 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009* Interim Results 2009 21 Source: BARB\ Infosys; *H1 2009, Individuals
Broadcasting Increasing market share ITV family – year on year change in TV ad market share % 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009* 2 1 0 (1) (2) (3) (4) (5) (6) (7) (8) *2009 figure compares forecast for H1 2009 to H1 2008. Data based on ITV estimates Interim Results 2009 22
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